Tennessee Gas Pipeline Co. (TGP) has executed binding 20-year term agreements with subsidiaries of Chesapeake Energy Corp. and Statoil for 100% of the capacity of its proposed Northeast Upgrade Project, which would provide 636,000 Dth of incremental firm transportation capacity from TGP's 300 Line Project now under construction in the heart of the Marcellus Shale in Pennsylvania to an interconnect in New Jersey, the El Paso Corp. subsidiary said. TGP's Line 300, which would provide 340 MMcf/d of capacity, is scheduled to be completed in 2011 (see Daily GPI, Dec. 11, 2009). The agreements for the Northeast Upgrade, with Chesapeake Energy Marketing Inc. and Statoil Natural Gas LLC, precede an open season, which is expected to be launched in February. Final capacity would be awarded in March. A spring 2011 Federal Energy Regulatory Commission filing date is planned for the Northeast Upgrade, with a scheduled Nov. 1, 2013 in-service date. The project would cost an estimated $400 million; most of the capital spending would take place in 2013, said El Paso.
Backers of the NorthernStar Natural Gas Corp.'s proposed Bradwood Landing liquefied natural gas (LNG) receiving terminal have joined a business-labor coalition lobbying the Oregon legislature for legislation to streamline permitting of energy and transportation projects. NorthernStar's LNG project threw its support behind a rally recently staged at the Oregon Capitol in Salem by Energy Action Northwest (see NGI, Feb. 15). In particular, Bradwood LNG's backers are supporting SB 1020, which they contend is needed to assure Oregon of reliable energy supplies. "Across Oregon, there are proposals to build new roads, water and sewer lines, transmission lines, rail lines and pipelines," a Bradwood Landing spokesperson said. "Collectively, these projects would invest billions of dollars in Oregon, creating thousands of family wage jobs and putting people to work for years. Many of these projects will be funded without any taxpayer dollars." A number of state legislators spoke in favor of the measure during the rally.
Production increases and a 22% increase in oil and gas revenues helped Newfield Exploration Co. report net income of $113 million (86 cents/share) in 4Q2009 compared with a loss of $789 million ($6.09/share) in the year-ago period. Houston-based Newfield reported oil and gas revenues of $414 million in 4Q2009 compared with $338 million in 4Q2008. Newfield reported that proved reserves at the end of 2009 were 3.6 Tcfe, a 23% increase compared with proved reserves a year earlier. The company said it replaced about 250% of 2009 production with the addition of new proved reserves, excluding the impact of new Securities and Exchange Commission reserve reporting rules. Substantially all of the reserve additions were from organic drilling programs. Newfield, which reported gas production of 46 Bcf in 4Q2009, said it expects 2010 production to be 278-288 Bcfe, an 8-12% increase compared with 2009.
Questar Corp.'s exploration and production (E&P) unit, which continued to be hobbled by realized gas prices in 4Q2009, saw production jump to just over 600 MMcfe/d, up 46% from 4Q2008, driven by strong growth from the company's Haynesville Shale, Woodford Shale and Pinedale Anticline plays. Questar E&P generated earnings before interest, taxes, depreciation and amortization (EBITDA) of nearly $1 billion in 2009, down 11% compared with 2008, due primarily to a 13% decrease in realized natural gas prices and a 37% decrease in realized oil and natural gas liquids (NGL) prices, Rattie said. Lower prices also drove a 7% decline in 4Q2009 E&P EBITDA compared with 4Q2008. The company will allocate about $900 million of capital spending to Questar E&P this year, about 60% of it to the Haynesville and Pinedale plays.
Interior Department's Minerals Management Service reported that it netted an additional $157 million in royalty underpayments, penalties and interest in 2009 as a result of aggressive enforcement actions. "We are strongly enforcing royalty regulations and working closely with companies to ensure they comply with their obligations," said Interior Secretary Ken Salazar. The agency said it collected $65 million through enforcement activities that include a comprehensive audit and compliance program; more than $34 million through sophisticated automated detection systems; and more than $58 million through follow-up enforcement actions, including civil penalties, negotiated settlement and other methods.
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